RDH assessed multiple system types, including direct electric tanks, insulated electric tanks, heat pump water heaters, and natural gas systems (non-condensing, condensing, and tankless). RDH used RETScreen Expert to compare financial performance across these systems, including lifecycle cost, utility savings, and cash flow.
RDH structured the analysis to include:
- Capital cost estimates (equipment, installation, permitting)
- Annual operating cost estimates based on HOT2000 modelling and electricity and natural gas rates
- Carbon cost impacts under a variety of carbon pricing scenarios
- Financial metrics including year 1 cash flow, net present value (NPV), and lifecycle savings
The RETScreen financial analysis identified the following results:
- Heat pump water heaters reduced annual energy costs by ~58–64% compared to gas systems.
- Heat pump systems achieved positive year 1 cash flow and the highest NPV, despite higher upfront cost.
- Standard electric resistance systems resulted in higher operating costs and negative NPV compared to heat pump systems.
- Increasing carbon pricing shifted the cost competitiveness in favor of electric systems and away from natural gas systems.
- Reducing hot water demand through low-flow fixtures improved the financial performance across all types of systems, with electric systems achieving positive NPV under lower demand scenarios.
Using RETScreen, RDH compared capital cost, operating cost, and carbon impact across multiple DHW system types. The analysis indicated that system selection was sensitive to utility rates, carbon pricing, and demand reduction. High-efficiency systems, particularly heat pump water heaters, demonstrated lower lifecycle cost and reduced carbon impact, supporting alignment between decarbonization targets and long-term cost performance. By translating energy performance into financial impact, the lifecycle cost analysis demonstrated the long-term value of low‑carbon heat pump DHW systems. Despite higher upfront cost, lower operating costs and reduced exposure to carbon pricing support electrification decisions and better overall long‑term cost performance.
